Max Hu of ZZ Capital International shared his annual macro update and presented his in-depth investment thesis on Unity Software (US: U) at Asian Investing Summit 2021.

Thesis summary:

Unity Software is the world’s leading platform for creating and operating interactive, real-time 3D (RT3D) content. The main business has been established over the past two decades around game development platforms, especially mobile games.

The company has been part of a duopoly in the global game engine market (along with Epic Games’ Unreal Engine), serving millions of independent game developers worldwide. Unity derives ~15% of revenue from the Greater China region and ~40% of revenue from Asia. It is the dominant platform in China, with more than 60% market share.

Chinese users have the highest engagement globally, surpassing US users, but monetization levels have been low. Unity has been accelerating its Chinese business, with revenue growth amounting to ~80% last year in China. In addition to Chinese growth in the near term, the company is also uniquely positioned to benefit from long-term growth in Virtual Reality.

Unity has a market capitalization of $28 billion and a forward P/S ratio of 27x, a “bubbly” multiple. However, if Max’s prediction about the future of virtual worlds holds true and the company executes well along the way, it may offer a once-a-lifetime investment opportunity, according to Max.

The full session is available exclusively to members of MOI Global.

Members, log in below to access the full session.

Not a member?

Thank you for your interest.  Please note that MOI Global is closed to new members at this time. If you would like to join the waiting list, complete the following form:

About the instructor:

Max Hu serves as the executive director for ZZ Capital International, the Hong Kong-based oversea investing platform for the ZEG, a leading Chinese privately-owned investment group with an AUM over 150 billion USD.

Previously, Max was Head of Asset Management for JT Asset Management. He was also the co-founder and fund manager of Tyee Capital Group. He managed Tyee Capital’s global opportunity fund, an equity-based, long-biased multi-strategy fund with a focus on extraordinary businesses. Max’s investment approach is contrarian, long-term, and concentrated. His investments have been focused on easy to understand, wide-moat companies with solid long-term growth prospects. He has worked at Deutsche Asset Management and is a CFA Charterholder.

Max graduated from Tsinghua University in China with a degree in physics and mathematics. He has done Ph.D. research in Financial Economics at ETH Zurich and holds a Masters’s degree from University Heidelberg.

The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.